The certification process for CFP candidates and mark holders could change following a review by a new commission to be appointed next year, the Certified Financial Planner Board of Standards announced Tuesday.
The CFP Board will appoint a Competency Standards Commission to evaluate the requirements that are mandated for those who want to use the CFP mark.
The board now requires candidates to have a college degree in any field, to have three years (6,000 hours) of experience in the financial industry or two years (4,000 hours) of experience working under the direction of a CFP financial advisor, and to complete 15 hours of continuing education each year that they are practicing advisors.
Any or all of those requirements could change.
“Everything is on the table,” Kevin R. Keller, CFP Board CEO, said in an interview. “I have been with the CFP Board for almost 16 years, and a holistic review of the requirements has never been done while I have been here.”
The Competency Standards Commission will look at all education, examination, experience and continuing education requirements. Any of them could be increased or decreased, Keller said.
The requirements are designed to ensure that CFP mark holders uphold “standards of excellence” for financial advisors. Some large firms, such as Vanguard, are beginning to require all of their advisors to hold CFP designations. Keller said the board wants to make sure the CFP advisors provide the best advice for clients. “But we don’t want to make the requirements so difficult that it is impossible to achieve certification.”
“As the professional organization that sets, administers, upholds and enforces competency and ethical standards for CFP certification, the CFP Board has the obligation to ensure that its certification requirements remain valid, reliable and legally defensible for the benefit of the public,” Keller said in a statement. “As we enter the 50th year of CFP certification, it's timely that we review the competency standards for the profession to make sure that they remain relevant.”
Dan Moisand, CFP Board chair-elect, added in a statement, “Periodic review of the competency standards is a core business function of a certifying organization. The commission will look at not only the appropriateness of each requirement, but also at how the requirements work together to ensure financial planning competency.”
There was no particular incident or issue that prompted the review, Keller said. The board undertook an extensive review of the Code of Ethics and Standards of Conduct that are imposed on CFP mark holders three years ago. Numerous changes were made in those guidelines at the end of the review.